Ithaca family fights back to stability

from The Ithaca Journal

The Millers built up credit card debt for a year and a half
By Topher Sanders
Journal Staff

ITHACA — Michael and Megan Miller never considered themselves impoverished, even when the couple ate oatmeal for breakfast, lunch and dinner for three months in 2003.

“I just feel like we had a taste of it,” Megan Miller said. “There are a lot of people who are way worse off.”

The Millers, who have two boys, ages 5 and 3, moved to Ithaca in 2003 from San Diego to find affordable real estate and enjoy the community.

Hard times blindsided the family when payments for an SUV they purchased a year prior began to kick in. The Millers went from financial stability and thoughts of purchasing a home to staring poverty in the face.

“One foolish choice that had a huge impact,” Megan said, describing the SUV purchase.

The family bought the vehicle with zero down and no payments for a year. They expected to make payments on the vehicle before moving to Ithaca but were unable to do so.

Joe King, a credit counselor for CFCU who has worked with Challenge Industries Job Club and the Three Pillar Foundation of the Ithaca Housing Authority, said he has seen families hurt financially from a single purchase.

“Reading the fine print and understanding it is key,” he said. “People should ask questions.”

A lot of people won't ask questions when they are signing paperwork on a big-ticket item because they are embarrassed or because too much information is coming at them, King said.

A barrage of information spewing from multiple salesmen and a crying baby left the couple unfocused during the transaction for their SUV, the Millers said.

“I like the car, but we just didn't know anything, and we were really dumb,” Megan said. “We made all of the mistakes that you are suppose to learn about and not make when you go to buy your first car. I don't even know what the sticker price was. We just signed away.”

The car dealership altered the couple's income to qualify them for the car, and the salesman focused on the projected monthly payments instead of the vehicle's total cost.

The vehicle payments were more than $600 a month, and their new rent in Ithaca was more than $500. Megan was pregnant with the couple's second child, and Michael's new job as a clerk for Greenstar food cooperative was paying about $250 a week, which was not as much as the couple expected.

Day care costs kept Megan at home instead of finding employment. In a matter of weeks the Millers went from having savings to spending more than they earned.

When the family paid their rent and car payment every month there was very little left for anything else.

“We basically bought our groceries and stuff like that on a credit card for almost two years,” Megan said. “We were short every month.”

For nearly a year and a half the couple exhausted their income on bills and used credit cards to purchase household necessities, transferring the balance of one card to another several times.

Megan said she wishes they would have learned more about finances when they were younger.

“If no one has showed you by example how to make those smart choices it's so much easier to fall into those traps,” she said.

King has seen a lack of experience with finances plague families.

“It starts really in high school,” King said. “You can kind of see it passed down to their kids because that's the only training they get. If the parents have used credit cards and gotten into some financial situations, the kids kind of see that and think it's all right.”

The couple tried to get out of their car deal, they spoke with credit counselors who merely told the couple they needed to earn more money, and they sought the help of the Department of Social Services.

“It felt like we were in a sand pit; the more you keep digging the deeper you get,” Megan said.

The SUV continued to haunt the couple as they tried to regain their footing. The Millers didn't qualify for food stamps because the vehicle was considered an asset.

While sitting in DSS's offices Megan felt frustrated by the others waiting with her.

“When I was in DSS I resented those people,” Megan said. “The people in the room that I felt, just by their attitude, that they were just in there to get a free handout, they made me mad because I just wanted temporary help. I just felt like they didn't appreciate that the system was there to help them. I was in there just nervous that they were going to reject us, which they did.”

The feelings Megan had while sitting in the DSS office are not unique.

“It's pretty intimidating going to ask for assistance, and a lot of people aren't programmed to ask for that type of assistance,” said Cindy Martin, family resources director for Tompkins Community Action. “They feel a little bit ashamed, and they are also feeling like they haven't done what they should have done and that they've let their families down and that they've kind of failed.”

The Department of Social Services is the last stop for some families.

“They've asked friends for money, they've asked family for help, and their self esteem is pretty bad when they arrive at DSS,” Martin said. “Combined with the fact that they are feeling so nervous and so tense and they probably are a little resentful that people are there and they look more comfortable and they aren't as tense.”

The couple's financial problems affected their relationship. The couple argued more often and didn't get along.

“The stress totally boils over and snowballs into everything,” Michael said

Megan agreed.

“It changes the whole family dynamic,” she said. “You can't just enjoy your day. We saw in just those few years the toll that it took on us emotionally and on our relationship. It has a huge spiraling downward effect, and it really takes a lot from your self-esteem and makes you feel like you are not worth anything.”

The couple began seeing a way out of their situation when they started taking programs offered by Alternatives Credit Federal Union.

“I really think Alternatives was our saving grace,” Megan said.

The Millers have used nearly every program the credit union offers. The couple has taken advantage of the organization's business class, a budgeting class, a free tax preparation program, and a savings and funds matching program to help grow their business that the bank offers for people earning low incomes. Megan credits the bank with helping her boost her freelance eco-friendly enterprise into a full-fledged business she calls Green Clean. The company has nearly 30 clients and has two employees who earn living wages.

“The best thing someone can do for themselves, and I don't care if you make $100 or $4,000, is do a periodic spending plan,” King said. “Monthly living expenses is what's killing everybody these days. They just keep going up and up, and if you don't keep track of that you'll have no idea how much you're spending.”

Keeping track of their expenses was key to helping the Millers slowly get their financial footing back.

“December was the first month that we've paid all of our bills on time and didn't have to borrow money from anybody to make it happen,” Megan said. “I thought I made a mistake. I spent like two days going over everything because we've never had money. There needs to be more programs that make it seem possible to help yourself.”

The couple said life is becoming less stressful as they are able to pay their bills with more regularity.

“It felt impossible to get out of for a time, and I can see how it would make people just want to give up and rely on the system,” Megan said.

The Millers hope their story will inspire others.

“I definitely feel a sense of accomplishment for us sticking it out and making it here,” Michael said. “I look back on it and just feel proud of the fact that we could keep it together.”

“If we can get through those tough times, what can't we do?” she said.

cbsanders@ithacajournal.com